What the effects of the journal entry to record the payment

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Problem 1: The board of directors of Metlock, Inc. declared a cash dividend of $2.35 per share on 43000 shares of common stock on July 15, 2020. The dividend is to be paid on August 15, 2020, to stockholders of record on July 31, 2020. The effects of the journal entry to record the payment of the dividend on August 15, 2020, are to

Option 1: decrease stockholders' equity and decrease liabilities.

Option 2: decrease liabilities and decrease assets.

Option 3: increase stockholders' equity and increase liabilities.

Reference no: EM132908721

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